Healthcare Renewal Named a Forbes "Must Read" Health Blog

Healthcare Renewal has been named a Forbes "must read" health blog, one of three under the category "physician blogs."

"These Web sites cover the many facets of health with integrity and authority--in a more useful, personal way" writes Forbes journalist and health reporter Rebecca Ruiz on Oct. 7 (link to article, page 1 and page 2).

-- SS

Pfizer (in the Guise of Pharmacia) Pfound to Violate Pfraud Law, While Pfizer CEO Made Pfederal Reserve Advisor

It was only a month ago that Pfizer Inc, the world's largest pharmaceutical company, submitted to a gargantuan $2.3 billion settlement and yet another corporate integrity agreement. As we posted here, this was the company's fourth major settlement of charges of unethical marketing behavior since 2002.

Now Pfizer is in trouble again. As reported by the AP,

A judge on Tuesday imposed $4.5 million in forfeitures on prescription drug company Pharmacia Inc.[a Pfizer Inc subsidiary] for misrepresenting prices and defrauding Wisconsin's Medicaid system.

A jury in February found that Pharmacia violated the state's Medicaid fraud law 1.44 million times over a decade. State Justice Department attorneys had demanded about $212 million in forfeitures, but Dane County Circuit Judge Richard Niess said jurors grossly overcalculated the number of violations.

After reviewing the evidence, the judge found the actual tally was 4,578.

He elected to set the forfeiture level at $1,000 per violation. The judge said he was concerned that if he ordered the maximum $68.6 million Pharmacia would pass the expense to consumers and nothing showed any of the fraudulent $7 million went directly to Pharmacia's profits.

On the other hand, the judge said, a $100 per violation forfeiture totaling $457,800 would 'not register so much as blip on Pharmacia's multibillion-dollar annual fiscal radar screen' and a higher amount would draw attention to the need to reform pharmaceutical reimbursement scales.

I must say that I do not understand the reasoning the judge used to set the penalties. If he thought that Pfizer would merely pass along a large penalty to patients, why would the company not pass along a smaller penalty to them.

In any case, this is just the latest in a long string of cases in which a health care corporation was found to have committed unethical or illegal acts, but the only the corporation itself, but not the people who actually performed, directed or authorized the acts, paid a penalty. And when the penalty is paid by the corporation, its impact can be spread over all stock-holders, all employees, and all patients, clients, or customers, thus diluting its effect, and protecting those who authorized, directed, or performed the acts in question.

I submit again that only when the people in health care leadership who perform, direct or authorize bad behavior pay penalties will bad behavior be deterred.

Note that while Pfizer may be the world's largest pharmaceutical corporation, it seems to be the corporation most often cited for, convicted of, or having to make settlements for bad behavior (see some recent examples here). (Although in the current case, you would have to read the news report very carefully to realize that Pfizer was involved. The fact that Pharmacia is a Pfizer subsidiary was only mentioned in passing.)

Nonetheless, one would think Pfizer's leadership would be ashamed, and their reputation would suffer. But no. At about the same time this latest settlement was announced, this report from Reuters appeared:

The Federal Reserve Bank of New York said on Thursday that Pfizer (PFE.N) chief executive Jeffrey Kindler and Loews Corp (L.N) chief executive James Tisch will fill the two vacancies on its board of directors.

Kindler was elected to finish a three-year term ending Dec. 31, taking the seat PepsiCo (PEP.N) chief executive Indra Nooyi resigned from in February.

Regional Federal Reserve banks' boards of directors offer recommendations on Fed policy, but have no policy-making powers. They also provide anecdotal information about the business conditions that help inform the central bank.

Regional Fed banks have three classes of directors: Class A, elected by member banks to represent banks; Class B, elected by member banks but representing the public; and Class C, which represent the public but are chosen by the Board of Governors in Washington.

Kindler and Tisch join Jeffrey Immelt, chairman and chief executive of General Electric (GE.N) as Class B directors.

I suppose Kindler could offer quite a bit of "anecdotal information" about bad behavior in the pharmaceutical industry. But it seems rather comic to think about the CEO of the world's biggest, and lately baddest pharmaceutical company as "representing the public." Rather, and more seriously, this is just the latest example of how leaders of health care organizations have joined the superclass, and how the superclass protects its own.

Health IT Vendors Trafficking in Patient Data?

Of all of the risks regarding electronic health records, the largest is perhaps to privacy and confidentiality, and other civil liberties through the ability of information technology to rapidly duplicate and disseminate massive amounts of data.

This duplication and dissemination can be performed in a controlled manner for the betterment of patient and public health, but it can also occur in a harmful manner that serves the interests of others, often without meaningful informed consent by the patients (legal jargon on typical disclosure forms that almost nobody reads or understands does not fall into what I consider "meaningful").

This can occur in, for example, the stealing of computers and computer backup disks, tape etc., which seems to be a common occurrence in the news in recent years, or through corporate processes that carry inherent risk of abuse. Here is just one recent example of both data mismanagement and theft involving not patients (by chance) but physicians themselves:

Blue Cross: Thousands of doctors' computer data stolen

Wednesday, October 07, 2009

By Bill Toland, Pittsburgh Post-Gazette

Tens of thousands of doctors under contract with Pittsburgh's Highmark Inc. are being notified that their personal information, including Social Security numbers or tax ID numbers, may have been compromised when a laptop containing sensitive data was stolen from a Blue Cross-Blue Shield Association employee.

Physicians and specialists in western and central Pennsylvania are being notified of the breach this week, according to a Highmark spokesman. Across the country, the number of affected doctors is expected to reach the hundreds of thousands once a review of the theft is complete, said national Blue Cross-Blue Shield Association spokesman Jeff Smokler. The stolen computer did not contain patient information. [Simply due to luck -ed.]

The letter sent to Highmark providers said "a BCBSA employee [transferred] provider data information onto a personal laptop, in violation of BCBSA's established data security policies.

I have recently become aware of an example of purposeful corporate healthcare data trafficking that gives me pause.

Cerner’s LifeSciences traffics in patient data taken from the EMRs its company sells to healthcare organizations. See the document below. They advertise:

Cerner LifeSciences’ data warehouses and consulting services help you manage your R&D opportunity through Cerner’s analytical solutions. Through our data mining of our vast warehouse of electronic health records (EHRs), you can accelerate development processes and reduce business risks. Each year, new compounds debut new abilities or first-in-class molecules. Far more common are new compounds that target the same receptors as compounds already in the market ... This is when Cerner LifeSciences makes it possible to analyze anonymous, HIPAA-compliant, EHR-derived data for efficacy and safety.

Cerner apparently includes contract language with their HIT customers that allows them to traffic in "de-identified" patient data for sale to drug companies and others, getting the data essentially as a "value add" (to the HIT vendor, that is) from its healthcare IT customers. (The flyer below does not indicate pricing of healthcare data, but it's likely substantial.)

A major HIT vendor selling patient data to anyone who wants it. Click to enlarge. (Full copy is at this link in PDF format).

This practice raises numerous questions:

• Meaningful informed consent issues: as an example, of 1000 patients at one of the facilities using this vendor's HIT products, what percentage would be able to tell me they know their data is being trafficked to pharmaceutical companies and other organizations for profit?

• Healthcare data ownership and stewardship issues: who, exactly, extracts the data for aggregation and sale? Hospital employees properly trained and bonded (i.e., Healthcare Information Management professionals) regarding privacy of patient data? IT personnel lacking such credentials and experience? HIT vendor employees?

• De-identification issues: what processes are being used to de-identify data? Who is performing it? At some point before the data is de-identified, it is protected information in identifiable form. Is access to the data during de-identification audited in any way, and if so, by whom? If not, why not? (Also see article on re-identification below.)
  

• Legal issues: who is, by contract, liable for data breaches that occur in the transfer process?

• Fiduciary issues: as I expressed in my July 22, 2009 JAMA letter to the editor regarding "vendor hold harmless" and IT defects gag clauses, are hospital executives further violating their fiduciary responsibilities by signing HIT contracts that surrender ownership of patient data to third parties? (see my posts "JAMA letter: Health Care Information Technology, Hospital Responsibilities, and Joint Commission Standards" and "Inquiry to Joint Commission on points I raised in my JAMA letter on HIT" for more on those issues.

• Pharma integrity issues: with the many stories on this blog and others about ethically questionable pharma practices such as ghostwriting, manipulation of clinical research, suppression of research, pushing drugs on physicians and patients for unapproved off-label uses, etc., what are these organizations going to do with the data? Who will have access to it, and will their access be audited? Are they going to resell it? Might they try to re-identify data to locate individuals of interest? And so forth.
  

Serious consideration of these issues in vendor-led healthcare data trafficking becomes more imperative in the face of just how easy it is to "re-identify" data:

Ohm, Paul: "Broken Promises of Privacy: Responding to the Surprising Failure of Anonymization" (August 13, 2009). University of Colorado Law Legal Studies Research Paper No. 09-12. Available at SSRN: http://ssrn.com/abstract=1450006

Abstract:

Computer scientists have recently undermined our faith in the privacy-protecting power of anonymization, the name for techniques for protecting the privacy of individuals in large databases by deleting information like names and social security numbers. These scientists have demonstrated they can often 'reidentify' or 'deanonymize' individuals hidden in anonymized data with astonishing ease. By understanding this research, we will realize we have made a mistake, labored beneath a fundamental misunderstanding, which has assured us much less privacy than we have assumed. This mistake pervades nearly every information privacy law, regulation, and debate, yet regulators and legal scholars have paid it scant attention. We must respond to the surprising failure of anonymization, and this Article provides the tools to do so.

Further, Cerner is digging deeper into the life sciences, licensing its "Discovere" system to clinical trials vendor such as Quintiles Transnational (link to story in Bizjournals.com):

Quintiles will use Cerner’s Web-based Discovere product, whose features include the ability to integrate data from study participants and site researchers and increase data quality by reducing transcription errors, the companies said in a release. A Cerner spokeswoman said the company isn’t disclosing financial terms of the deal.

According to an entry at HISTalk, part of "Discovere" is the former First Genetic Trust technology that Cerner bought some time ago. Quintiles signed an agreement with Cerner back in 2001 and took an equity position in it. The Discovere modules include biobanking, research registries, public health investigator workflow, clinical trials management, and adverse event reporting.

Is Cerner also selling HIT-gleaned patient data to Quintiles and other CRO's (clinical research organizations)?

Other HIT vendors are sure to follow in Cerner's footsteps for competitive reasons, if not already doing so.

Another major issue:

HIT vendors like this are devoting resources to profit from medical data, diverting resources from their core business. Might health IT vendors make better use of their resources, such as improving the core products they sell to hospitals and clinicians, avoiding the "mission hostile user experience" I wrote about in this eight part series?

Might they devote resources to solving problems that are affecting entire national health IT programs, instead of peddling data from the systems they have managed to implement to third parties?

From the UK's experiences as recorded in 2007 by the former head of their National Program for HIT in the NHS (NPfIT):

Richard Granger has said he was “ashamed of the quality of some of the systems put into the NHS by Connecting for Health suppliers”, singling Cerner out for criticism (link). Going further than he before in acknowledging the extent of failings of systems provided to some parts of the NHS - such as Milton Keynes – the Connecting for Health boss, said "Sometimes we put in stuff that I'm just ashamed of. Some of the stuff that Cerner has put in recently is appalling."

As recorded in Jan. 2009 by the UK House of Commons - Public Accounts Committee :

... Termination of Fujitsu's contract has caused uncertainty among Trusts in the South and new deployments have stopped. One option: have a choice of either Lorenzo or [Cerner] Millennium. There are, however, considerable problems with existing deployments of [Cerner] Millennium and serious concerns about the prospects for future deployments of Lorenzo.

... Programme not providing value for money at present because there have been few successful deployments of the [Cerner] Millennium system and none of Lorenzo in any Acute Trust. Trusts cannot be expected to take on the burden of deploying care records systems that do not work effectively … the Department should assess the financial case for allowing Trusts to put forward applications for central funding for alternative systems compatible with the objectives of the Programme.

Most recently, in the UK Cerner's Millennium product is blamed for the jump from 1,700 to 23,000 patients whose referrals don’t meet the 18-week target from referral to treatment at Barts and the London NHS trust.

Should HIT vendors be devoting resources to data peddling, instead of focusing on their core mission to produce usable HIT that can facilitate healthcare professionals in providing care?

Finally, as an added item of interest, our current healthcare "czar", Nancy-Ann DeParle was on the board of Cerner just prior to appointment in the current administration.

All of these issues considered, while I am not implying improprieties current or future, the possible permutations of problems in the resale of clinical data by HIT vendors potentially created by careless data stewardship, profit motive, conflict of interest, malevolent motives, etc. is endless.

If there ever were a scenario for civil liberties groups to explore, it's this one.

-- SS

addendum on HIT quality and COI issues: found this at HISTalk as well:

IT outsourcing puts MU Health at risk

An associate professor of pathology at University of Missouri criticizes his employer’s decision to outsource to Cerner … A simple Internet search turns up a plethora of complaints and reports of lawsuits regarding the effectiveness of Cerner’s software and, more important, its failure to provide requested support. The pattern of receiving untested software has been a recurring problem at this institution ...

... University Hospital’s success depends largely on the effectiveness of the people in information technology. In the past on two occasions, the billing was so flawed the hospital faced serious fiscal problems. The most recent one was in 2002, when the hospital’s viability was threatened. The major issue was the inability to produce accurate and timely billings, which cost the system millions of dollars. [where have I seen that before? How about: here (Yale) and here - ed.]

... The medical school’s administrative residency program is on probation and is undergoing critical review; a major factor is that the Cerner system is so cumbersome that resident training is compromised … Three years ago, the radiology department dropped a Cerner software program because it was seriously flawed.”

... [UM President] Forsee has several business and personal ties to the company (Cerner). Forsee and Cerner CEO Neal Patterson serve together on at least two boards of trustees, and online records indicate Forsee’s son-in-law, Brandon Bell, works for Cerner.”

If this all is true, I believe the problems with HIT in general are no better now, and probably worse, than when I started writing about such issues a decade ago.

I rest my case on whether the HIT vendors should focus on solving basic quality, usability and efficacy issues before peddling data ...

-- SS

A Board of Trustees, or a Social Club for the Superclass?

We just posted about the unlikely appointment of one Mr Robert K Steel as a trustee of the Hospital for Special Surgery in New York. Mr Steel appears to have no particular expertise or experience in health care, and no special affinity for its values. On the other hand, Mr Steel was briefly the CEO of Wachovia who presided over that company's demise, despite his avowed goal of keeping it independent. Previously, he served as an Under Secretary of the Treasury during Secretary Henry Paulson's controversial bail-out of financial institutions. He also was Chairman of the Board of Trustees of Duke University during the time of the lacrosse scandal, and pledged his full support to the actions of its President (whom he had a personal role in hiring), including those that seemingly put preserving the Duke brand ahead of protecting the rights of its students.

Why would such a person be appointed to the board of a prestigious teaching hospital?

Maybe he was seen as a good fit.

The hospital board has 42 members in addition to its CEO ex-officio. Of these, 13 are physicians, and 29 are "civilians." Of the latter 29, 23 by my count have major relationships, and frequently have current or past leadership roles in financial companies, some of which were recipients of recent Treasury Department bail-outs. Thus, a majority of all board members come from finance. In addition, 7 of the 13 physician board members have financial relationships with health care corporations that might be construed as conflicts of interest. The details are below:

Non-Physician Board Members

Atiim "Tiki" Barber (sports broadcaster)
James M Benson - retired chairman of John Hancock Life Insurance; retired Chairman, President and CEO of New England Financial and of GenAmerica Financial Corporation
Peter L Briger Jr - Principal and Co-Chairman, Fortress Investment Group
Michael C Brooks - Partner, Venrock
Charles P Coleman III - Tiger Global Management
Leslie Cornfeld (deputy US Attorney)
Cynthia Foster Curry (spouse of owner of Toyota dealer)
Barrie M Damson - President and Chair, Damson Financial Resources Inc
James G Dinan - Chairman and CEO, York Capital Management
Winfield P Jones (attorney)
Monica Keany - managing director, Morgan Stanely
David H Koch - executive vice president and member, board of directors, Koch Industries (a conglomerate that provides "commodity and financial trading services" among other products and services)
Lara R Lerner - spouse of Randolph Lerner, former CEO of MBNA, which he sold to Bank of America, now has family holdings (>$1 billion in 2008) of Bank of America stock
Marylin B Levitt - spouse of Arthur Levitt Jr, former chair of the SEC, now advisor to AIG and the Carlyle Group
Alan S MacDonald - chief client officer, Citigroup
David M Madden - founder and principal of Narrow River Management (investment management company that focuses on pharmaceutical companies)
Richard L Menschel - senior director, Goldman Sachs (in 2002)
Dean R O'Hare - retired CEO of Chubb Corporation, director of DFA Capital Management
Aldo Papone - retired chairman of American Express Travel Related Services
Gordon Pattee - President, MAP Capital Corp
Charlton Reynders Jr - Chairman and CEO, Reynders Gray Co
Susan W Rose (philanthropist)
William R Salomon - honorary chairman, Citigroup
Jonathan Sobel - Global Head of Risk Management, Investment Management Division, Goldman Sachs
Robert K Steel - retired CEO, Wachovia (see above)
Daniel G Tully - founding partner and managing director, Altaris (investment company focused on "healthcare industry")
Mrs Douglas A Warner III - spouse of former chairman of JP Morgan Chase, current director of General Electric (which has both health care and finance divisions)
Kendrick R Wilson III - former executive, Goldman Sachs
Ellen M Wright (occupation not clear)

Physician Board Members

Mathias P Bostrom MD - consultant for Smith & Nephew
Richard A Brand MD -
Charles N Cornell MD - royalties from Exactech
Melvin J Glimcher MD -
Steven R Goldring MD - member, board of directors, Telik
David L Helfet MD - member of advisory boards, OHK Medical Devices Inc, Healthpoint Capital, Orthobond Corp
Carl F Nathan MD -
Stephen A Paget MD - consultant to Medarex, Crescendo Bioscience
Scott Rodeo MD
Thomas P Sculco MD - royalties from Exactech
Russell F Warren MD - chairman of the board, Highlands Acquisition Corp, chairman of the scientific advisory board, chief scientific officer, principal member of the investment committee, Ivy Capital Partners, board of directors, Orthonet, royalties from Biomet, member of scientific advisory board, Cayenne Medical, member of scientific board of advisors, HealthPoint Capital, royalties from Smith & Nephew
Torsten N Wiesel MD -
Philip D Wilson Jr MD -

Summary

As we have written previously, boards of trustees of not-for-profit health care organizations are supposed to supervise the management of these organizations, making sure it is prudent, and upholds the organizations' missions. Boards have duties to exercise reasonable care, avoid conflicts of interest, and again, uphold their organizations' missions. Thus, ideally, boards should be composed of people most likely to fulfill these duties.

In the real world, current board members usually have sole authority to appoint new board members. Thus it may be all too tempting to make fit with the current board members the main criterion for appointment of new board members. We have posted about university and hospital boards which have pluralities or majorities of members from the finance sector. Such remarkable homogeneity suggests that they picked new board members because of their similarity to current board members. (For example, see posts about the boards of Dartmouth, Harvard, and Yeshiva Universities, and of Partners Healthcare.)

Thus, the boards of prestigious not-for-profit health care organizations may come to resemble social clubs for the superclass more than collections of passionate defenders of the progress of health care.

It is hard to imagine how boards packed with finance industry executives would be the best upholders of academic and health care values, especially after the shortcomings of many finance industry leaders became so obvious in the global financial meltdown/ great recession.

If health care is to become more affordable, more accessible, of greater quality, and less demoralizing for health care professionals, health care organizations need leaders known for their devotion to putting patients first rather than their devotion to socializing with their cronies.

A Trustee of What "Caliber" for the Hospital for Special Surgery

The Hospital for Special Surgery in New York, a prestigious institution focused on orthopedics and rheumatology, closely affiliated with Weill Cornell Medical College, just announced its newest trustee, whose qualifications for the position turn out to be just a wee bit curious. Here they are as described by the press release:

He is a former CEO of Wachovia

Hospital for Special Surgery announced today that Robert K. Steel, former President and Chief Executive Officer of Wachovia Corporation, has been named a member of the hospital's Board of Trustees.

Steel facilitated Wachovia's merger with Wells Fargo to create the second-largest retail brokerage in the country.

Before then, he served in the Treasury Department

Prior to running Wachovia, Steel served in the U.S. Treasury Department as Under Secretary for Domestic Finance, a Senate-confirmed position. In that role, he was the principal adviser to Secretary Henry Paulson on matters of domestic finance and led the department's activities regarding the domestic financial system, fiscal policy and operations, and governmental assets and liabilities.

Steel brings a wealth of experience to the Hospital for Special Surgery Board. He regularly testified before House and Senate Committees on matters such as reform at Fannie Mae and Freddie Mac, foreclosure prevention, and the rescue of Bear Stearns.

Before then, he was a leader at Goldman Sachs

Steel spent almost 30 years at Goldman Sachs, rising to vice chair of the firm.

He was also chairman of the board of Duke University

In 2009, Steel completed his term as chair of the board of Duke University.

The other members of the Hospital for Special Surgery board were delighted by Steel's qualifications:

'All on the Board of Trustees are delighted to have someone of the caliber of Robert Steel join us to help guide the future of our institution as a leader in orthopedics, rheumatology and their related disciplines,' said Aldo Papone, Co-Chair of the Board of Trustees at the Hospital for Special Surgery.

Hospital Board Co-Chair Dean R. O'Hare added, 'As patients continue to seek the Hospital for Special Surgery's world class services in record numbers, we are very pleased Robert Steel is here to support this institution and the superb team of people who work here.'

Setting aside the obvious issues that Mr Steel seems to have no particular knowledge of or training in medicine or health, and nothing in the press release suggests he has particular devotion to the values of health care, what do his cited qualifications really mean? Let's go through them in the order they were mentioned above.

Former CEO of Wachovia

In fact, Steel became CEO of Wachovia in July, 2008, only to soon preside over the company's failure and its hurried merger with Wells Fargo. As reported by the New York Times, by September, 2008, Steel had to give up any hopes of keeping Wachovia independent,

As concern spread Friday that more banks might run into trouble even with a $700 billion rescue for the financial system, Wachovia, one of those hardest hit by the housing crisis, became the latest to reach for a lifeline.

Weighed down by a huge portfolio of troubled mortgage loans, the nation’s fourth-largest bank by assets entered into preliminary deal talks with Citigroup, and extended feelers to Wells Fargo and Banco Santander of Spain....

In July, the bank hired Robert K. Steel, 56, a former vice chairman at Goldman Sachs, from the Treasury Department, where he worked with Treasury Secretary Henry M. Paulson Jr., trying to resolve the mortgage market crisis. Mr. Steel vowed to keep Wachovia independent and sought to raise $5 billion in capital over the next year by selling noncore assets.

The deal with Citigroup fell through, and Wachovia was taken over by Wells Fargo on January 1, 2009. So although Wachovia's portfolio of doubtful mortgages was not the fault of Robert K Steel, he did not succeed in his vow of independence proved to be hollow.

Furthermore, questions were raised about Mr Steel's overly optimistic predictions about Wachovia's financial conditions just before the company had to enter into merger talks. As reported by the New York Times on September 30, 2008:

'Jim, we have a great future as an independent company,' Robert K. Steel, Wachovia's chief executive, told James Cramer on CNBC's 'Mad Money.' 'We're also focused on very exciting prospects when we get things right going forward. I didn't have time today to talk about the good things going on at Wachovia.'

That interview wasn't last month or last year -- it took place, amazingly, two weeks ago. Wachovia's shares closed at $10.71 that day. On Monday, Citigroup bought the company for $1 a share.

What was Mr. Steel thinking? Did he think he could 'spin' his way to survival?

On Mr. Cramer's show Monday night, he spent an entire segment apologizing to his viewers about having Mr. Steel on the program and for his own bullish call on Wachovia's stock. 'I screwed up,' he said, referring at one point to Mr. Steel as a friend for 25 years. 'I believed in the guy. Did he take advantage of me? Perhaps yes.'

Early this year, the Wall Street Journal reported that these remarks lead to an investigation by the US Securities and Exchange Commission (SEC):

The Securities and Exchange Commission is investigating remarks that former Wachovia Corp. Chief Executive Robert K. Steel made about the future of the bank the day before it started talks about a potential merger....

Among the issues under scrutiny is whether Mr. Steel, 57 years old, misled investors when he appeared on CNBC's 'Mad Money' program on Monday, Sept. 15.

The next day, Sept. 16, Wachovia's board met by telephone to discuss strategic options for the company, including raising money, selling core businesses and merging with another company, according to an SEC filing.

On Sept. 17, Mr. Steel called Morgan Stanley CEO John Mack to discuss a potential merger, according to people familiar with the matter.

By the week of Sept. 22, under pressure from regulators and with customers starting to withdraw deposits, Mr. Steel was immersed in merger negotiations with Citigroup Inc. and Wells Fargo & Co. executives, according to regulatory filings and people familiar with the matter.

After initially agreeing to sell its banking operations to Citigroup, Wachovia on Oct. 3 agreed to sell the full company to Wells Fargo.

So although Mr Steel could not be blamed for the unfortunate financial position of Wachovia on the day he took over as CEO, he failed in his goal of keeping the company independent, and questions have been raised as to whether his overly optimistic comments just before merger negotiations began misled investors. Thus, his brief performance as leader of Wachovia does not seem something to boast about as a qualification to be a trustee of the Hospital for Special Surgery.

Under Secretary of the Treasury For Finance

Mr Steel was appointed to his post at the Treasury Department by Henry Paulson. Mr Steel seemed to have a major role in the Paulson Treasury Department's response to the global financial meltdown of 2008. Criticism of Paulson and his department's response to the crisis is so well-known that we need not repeat it here. In response to the discussion in the news release above about Steel's testimony before congress, it is worth quoting a New York Times article about a hearing that took place after the bail out of Bear Stearns, but before the crisis became full-blown.

'How do we guard against a future Bear Stearns,' asked Senator Charles E. Schumer. 'Was someone asleep at the switch?'

Later,

Did Henry M. Paulson Jr., the Treasury secretary, mandate a rock-bottom price for Bear?

'What did you know and when did you know it,' [Senator Christopher] ... Dodd asked, his voice loud as he pressed Mr. Bernanke, Mr. Steel and Mr. Geithner for an answer.

Mr. Steel and Mr. Geithner were artful and vague in their responses....

And just a few days ago, a story emerged that Paulson's plans to force a merger of Wachovia and Goldman Sachs failed because of the multiple conflicts of interest involved, including those affecting Mr Steel (as per Bloomberg News):

Paulson, the CEO at Goldman Sachs until mid-2006, contacted current CEO Lloyd Blankfein and an unidentified Wachovia director, urging them to consider a combination, Sorkin reported. Goldman Sachs co-President Gary Cohn and Wachovia CEO Robert Steel -- a former vice chairman at the New York investment bank and an undersecretary to Paulson at Treasury -- thought they were near completion of a transaction after Fed Governor Kevin Warsh said the central bank would consider a merger, according to the excerpt.

Billionaire investor Warren Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., was contacted about investing in the combined companies, Sorkin reported. Buffett told a Goldman Sachs banker the merger would never happen because of the investment bank’s ties to officials at the Treasury and Wachovia, Sorkin reported.

So it is not obvious that Mr Steel's work at the Treasury Department covered him in glory, or constituted a particular qualification to lead the Hospital for Special Surgery.

Chairman of the Board of Duke University

Mr Steel's time in the leadership of Duke coincided with one of the major scandals to afflict higher education in the 21st century, usually called the Duke Lacrosse Scandal. Very briefly, several Duke University students who were also on the university's lacrosse team were charged with raping an exotic dancer. After they were charged, the university leadership seemed to judge that the players were guilty before the trial, and that the whole lacrosse team had to bear some sort of collective guilt. Eventually, the charges were dismissed for lack of evidence, and the prosecutor who pursued them so avidly was disgraced.

It turns out that Mr Steel had a role in this scandal too.

According to a New Yorker article, Mr Steel took a leadership role in the hiring of Due President Richard H Brodhead:

The man charged with bringing Brodhead to Duke was Robert K. Steel, a trustee and chairman of the search committee....

After the lacrosse players were accused of rape, a bizarre email led Brodhead to abandon a measured approach:

Brodhead, who had been trying to maintain a balance between avoiding prejudgment and satisfying the mounting pressure for action, was outraged. He said he found the message 'sickening and repulsive,' and he acted immediately. He suspended McFadyen [the student who wrote the email]. Coach Pressler was informed that he had until the end of the day to leave the campus, where he had coached for sixteen years. Brodhead also announced a series of committees that would investigate the team, the administration’s handling of the matter, and the Duke culture itself. In a letter to the Duke community, he wrote that the lacrosse episode 'has brought to glaring visibility underlying issues that have been of concern on this campus and in this town for some time.' The letter went on:

They include concerns of women about sexual coercion and assault. They include concerns about the culture of certain student groups that regularly abuse alcohol and the attitudes these groups promote. They include concerns about the survival of the legacy of racism, the most hateful feature American history has produced.
Compounding and intensifying these issues of race and gender, they include concerns about the deep structures of inequality in our society—inequalities of wealth, privilege, and opportunity (including educational opportunity), and the attitudes of superiority those inequalities breed. And they include concerns that, whether they intend to or not, universities like Duke participate in this inequality and supply a home for a culture of privilege.

This quote in retropsect is beyond ironic given that there was never good evidence to support the charges against the lacrosse players.

Brodhead cancelled the lacrosse team's season, but it turned out his reasoning, and that of Mr Steel who seemed to have a major role in the decision, was based mainly on the perceived need to preserve the "Duke brand":

When Brodhead cancelled the season, he had said that the moment was too serious to be playing games. What he meant, in part, was that Duke could not be seen to be playing games. From the start, Brodhead had been forced to navigate among several potentially hazardous interests—lacrosse parents who felt angry and abandoned by the school, dismayed alumni and donors, the agitated citizens of Durham, the clamoring press—while protecting what is known in the Allen Building as 'the Duke brand.' On that fitful weekend in late March when the TV satellite trucks hit campus, the lacrosse team could be seen practicing for the Georgetown game, a scene that became an endless video loop suggesting institutional indifference. 'We had to stop those pictures,' Bob Steel says. 'It doesn’t mean that it’s fair, but we had to stop it. It doesn’t necessarily mean I think it was right—it just had to be done.'

Clearly, according to Mr Steel and his protege, President Brodhead, preserving the Duke brand was more important than the fair treatment of its students.

In 2007, as per this Fox News report, the North Carolina Attorney General dispelled the accusations against the lacrosse players.

[Attorney General Roy] Cooper said Wednesday that not only was there insufficient evidence proving the three assaulted an exotic dancer at an off-campus lacrosse player in March 2006, but there was 'no credible evidence that an attack occurred at that house on that night.' He even proclaimed the players 'innocent.'

'The result of our review and investigation shows clearly that there is insufficient evidence to proceed on any of the charges,' Cooper said. 'Today we are filing notices of dismissal for all charges.'

He added: 'We believe these cases were a result of a tragic rush to accuse and failure to verify serious allegations. Based on these significant inconsistencies of evidence and the various accounts given by the accusing witness, we believe these three individuals are innocent of these charges.'

After their exoneration, Mr Steel sent out a message affirming his support of President Brodhead's decisions (presumably including suspending the lacrosse season to preserve the Duke brand, firing the lacrosse coach for no obvious reason, and launching an unwarranted witch-hunt against erroneous attitudes toward sexual assault, and race and gender.) Per the Durham-in-Wonderland blog (written by Prof KC Johnson, who also wrote the book about the Duke lacrosse scandal), here is what Steel wrote:

Throughout the past year President Richard Brodhead consulted regularly with the trustees and has had our continuing support. He made considered and thoughtful decisions in a volatile and uncertain situation. Each step of the way, the board agreed with the principles that he established and the actions he took.

Finally, Steel is now a defendent in a law-suit in the aftermath of of this case, per the AP:

Three unindicted Duke University lacrosse players have amended their civil lawsuit against the school and the city of Durham stemming from false rape accusations two years ago.

The Herald-Sun of Durham reported Wednesday the players allege that Duke trustees chairman Robert Steel controlled the school's response and that the school was most interested in protecting its image.

So Mr Steel's handling of the Duke lacrosse scandal during his time as chairman of the board of that university also did not exactly cover him in glory, or provide an obvious qualification for him to be a trustee of the Hospital for Special Surgery.

Summary

So Mr Steel
-as CEO of Wachovia failed to keep the company independent, and is under investigation of charges that he misled stock-holders;
- as Under Secretary of the Treasury was involved in what many believe was a bungled strategy to combat the global financial meltdown mainly by handing billions of dollars to the misguided Masters of the Universe who brought the meltdown upon us; and
- as Chairman of the Board of Duke University seemed to put an ultimately unsuccesful attempt to defend the Duke brand ahead of the rights of its students, and is now the defendent of at least one related lawsuit.

It is too soon to tell whether the SEC investigation of the lawsuit will be decided for or against Mr Steel. However, it seems utterly bizarre that the board of the Hospital for Special Surgery would regard Mr Steel's track record as indicative of the "caliber" needed to lead one of the country's premier hospitals.

How Mr Steel inspires such praise brings to mind some findings of pollster Frank Luntz that appeared in the Los Angeles Times:

Today, Americans are boiling mad, and the elites from Washington to Wall Street to West Hollywood don't get it. It can best be summarized by 12 short words bellowed by Howard Beale, the deranged TV anchor in the movie 'Network': 'I'm as mad as hell, and I'm not going to take this anymore.'

Americans in the unhappy majority are struggling to keep their jobs as million-dollar bonuses are being awarded at companies their tax dollars bailed out.

The core American complaint about politics is that wrongdoing isn't punished, other than at the next election. From scandalous personal behavior to bailouts of everyone and everything except the hardworking middle class, Washington is seen as the source for America's mistakes. Enforcing rules and letting failures fail would stop the excesses today and prevent the mistakes of tomorrow.

Such accountability in business would likewise prevent executives at imploding companies from walking away with millions while their employees get skunked.

For business and political elites, the message should be clear: Restore trust.

Mr Steel's unlikely career trajectory shows how once someone becomes a member of the superclass, the new power elite that spans business, government, and academics, that person is likely to continue to wield power no matter how poor his or her track-record, to the detriment of nearly everyone else.

The Role of the RUC in Medicare's Price-Fixing and Rationing Remains Anechoic

An important part of the noisy and contentious debate about health care reform in the US centers on the role of the government as a provider of health insurance. Some on the left want a government "single-payer" plan to be the only health insurance available. Some left of center want a government "public option" health insurance plan to be available, particularly to those who have trouble obtaining commercial insurance. Some on the right want none of it, and sometimes note that the existing government single-payer plan for the elderly and disabled, Medicare, has important faults that would only become more significant if the plan is extended or duplicated. Yet even critics of Medicare on the right do not seem to want to talk about what may be its worst fault.

The latest example, an op-ed piece by Dr Scott Gottlieb, appeared in the Wall Street Journal yesterday. Dr Gottlieb's main point was that health care rationing by either government or private insurers is inevitable, but that "government does it in far more byzantine and arbitrary ways." In particular,

Consider the $450 billion Medicare program. It provides a model for—indeed its bureaucracy could well end up running—the 'public option' health plan that Mr. Obama wants to offer all Americans under the age of 65. In recent years, Medicare's staff has been aggressively restricting coverage for costly treatments.

This often means limiting access to the costliest technologies. To do this Medicare relies on its rationing and pricing systems.

Gottlieb then cited several examples, "tortured decisions concerning the use of implantable defibrillators," and "the travails of the pharmaceutical company Spracor and its drug Xopenex, an innovative respiratory medicine that competes with the chemically distinct and much cheaper generic albuterol."

Finally Gottlieb decried Medicare's decision making processes applied to costly technologies as "impenetrable." His summation was

There's nothing inherently wrong with a program like Medicare seeking value for taxpayers. But it shouldn't make up the rules as it goes.

Let me first say that I actually agree with Dr Gottlieb's main points. Any government or private health insurance plan ought to seek value for its money. However, how it does so ought to be rational, based on understanding of medicine and the clinical context, and transparent and accountable to the patients on whose behalf such plans pay. "Covert rationing" (as has been well discussed in the Covert Rationing Blog) raises worries that decisions are being made just to save money, not to improve value, and even that decisions are being made without informed consideration of the clinical context, or based on the self-interest of the decision makers, or even that decisions may result from bribery and corruption.

But if Dr Gottlieb is so concerned about Medicare rationing care as a result of opaque and unaccountable decision making, why is he not more concerned about how Medicare controls the prices of physicians' services than about its decisions about a few expensive, high-tech and infrequently used treatments?

We have written again and again about how Medicare has allowed decisions about what physicians are paid for providing various services to be made de facto by an opaque private committee run by the American Medical Association. This decision-making process has lead to relatively generous payments for procedures, versus miserly payments for "cognitive services," (that is, "evaluation and management services," or for physicians interviewing, examining, and counseling patients, making diagnoses, predicting prognoses, and making decisions about treatment.) The resulting perverse incentives are a major reason that primary care has become increasingly unavailable, and for our expensive patterns of care dominated by high-technology and invasive procedures. More detail quoted from a previous post appears below.

As we have discussed, the US Medicare system determines what it pays physicians using the Resource Based Relative Value System (RBRVS). This system determines the pay for every kind of medical encounter according to a complex formula that is supposed to account for physicians' time and effort, physicians' practice expense, and the cost of malpractice insurance. The components of physicians' effort assessed are, in turn, technical skill and physical effort; the required mental effort and judgment; and stress due to the potential risk to the patient.

To keep the system, which was started in 1990, current, requires addition of new kinds of encounters, which means encounters involving new kinds of procedures, and updating of the estimates of various components, including physicians' time and effort. To do so, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee (RUC). The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are secret, as are the proceedings of the group.

This opaque and unaccountable process has resulted in increases outstripping inflation in fees paid for procedures, while fees paid for 'cognitive" medicine,' i.e., for primary care, and for services that involve diagnosis, management of acute and chronic disease, counseling, coordination of care, etc, but not procedures, have lagged inflation. The effects of the RUC have been amplified by the unexplained tendency of commercial managed care and health insurance to track the RBRVS system when making their own payments to physicians.For further details about the RUC, see these posts on Health Care Renewal (here, here, here, here, and here) and important articles by Bodenheimer et al,(1) and Goodson.(2) By the way, why the US Center for Medicare and Medicaid Services (CMS) relies de facto exclusively on the RUC to control the RBRVS system, and why the AMA made the RUC into a secret organization apparently beholden only to the organization's proceduralist members are unanswered questions.

Our most recent posts about the RUC are here, here, and here. Other bloggers, notably including Dr Robert Centor on DB's Medical Rants, have criticized the RUC. The Society of General Internal Medicine seems to be the only medical society that has criticized the RUC (see this post). Yet even ostensibly conservative and libertarian pundits who decry price-fixing and rationing by Medicare have ignored this vivid and important example of opaque and unaccountable price-fixing and rationing. And ostensibly liberal proponents of public options and single-payer systems have not explained how they would make their rationing more rational, transparent, and accountable, or how simply insuring more patients under Medicare-like programs would not result in even higher costs, poorer access, and worse quality.

The lack of discussion of the RUC remains one of the more striking examples of the anechoic effect. Failing to address why our costs are so high, are access is so poor, and our quality is so challenged will make it likely that any supposed reform effort will only make these problems worse.

References

1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link here.
2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link here.

Intermune Executive Convicted of Fraud

From today's New York Times comes word of an unusual legal case,

In a verdict that could strike fear into pharmaceutical industry executive suites, the former head of a drug company was convicted of wire fraud Tuesday for issuing what federal prosecutors called a misleading press release that contributed to off-label sales of his company’s drug.

But the executive, W. Scott Harkonen, the former chief executive of InterMune, was acquitted by the federal jury in San Francisco of a related charge of off-label marketing itself, known as 'misbranding,' the Justice Department said.

The case was unusual because off-label marketing cases are often settled with the company paying a fine. It is rare for prosecutors to press charges against individual executives.

'Today’s verdict demonstrates that pharmaceutical executives will not be able to hide behind a corporate shield when they promote drugs using false or fraudulent information,' Thomas P. Doyle, a special agent in the Food and Drug Administration’s office of criminal investigations, said in a statement Tuesday.

InterMune’s drug, Actimmune, was approved for two rare genetic conditions. But the main sales of the drug, which peaked at $141million in 2003, came from an unapproved use: treating idiopathic pulmonary fibrosis, a scarring of the lungs that can be fatal.

InterMune conducted a large clinical trial testing Actimmune as a treatment for the lung disease. The drug did not achieve the goal of the trial, which was to improve lung function compared with a placebo. But InterMune found that if only the patients in the trial with mild or moderate disease were considered, those who got the drug lived longer than those who received the placebo. The company highlighted the 'survival benefit' in a news release, issued in August 2002. [Editor's note - if the primary study outcome was improvement of lung function, and the only 'positive' result was improvement of survival in one sub-group, that result may have been due to chance alone, due to multiple statistical comparisons. If one does analyses on multiple sub-groups and for multiple endpoints, the likelihood of finding a 'significant' result increases with the number of such analyses done.]

Prosecutors said the news release was part of a scheme to induce off-label sales of Actimmune, also known as interferon gamma, which costs about $50,000 a year.

[The company's attorney] Mr. Topel said interpretation of the clinical trial results was a matter of debate. 'One position in a scientific dispute has been criminalized — quite an astonishing thing,' Mr. Topel said in an interview.

Wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. Dr. Harkonen, who remains free on bail, has not been sentenced.

A medical doctor by training, he was chief executive of InterMune from February 1998 until June 2003.

InterMune agreed to pay about $37 million in 2006 to settle charges related to Actimmune marketing. The company, based in Brisbane, Calif., also entered into a five-year corporate integrity agreement with the Department of Health and Human Services.

In 2007, a second big trial of Actimmune found that the drug did not prolong lives of patients with pulmonary fibrosis. Sales of the drug have dwindled year by year. [Editor's note - this suggests again that the result in the sub-group from the first trial might have been a false positive due to multiple comparisons.]

This case is unusual because it involved the prosecution of an individual who appeared to be responsible for the allegedly unlawful conduct. In most cases of unethical or unlawful conduct alleged on the part of health care organizations, at most it is the organization itself that has paid the penalty, usually in the form of a fine, sometimes accompanied by a corporate integrity agreement or deferred prosecution agreement. (See relevant posts here.)

We have argued that such penalties applied to corporations do little to deter bad behavior. A fine can just be a cost of doing business. The cost of the fine may diffuse across the whole organization. For public for-profit corporations, the fine may finally be paid by stockholders (through lower dividends or lower stock appreciation), employees as a group (through lower pay), and customers, clients, or patients (through higher prices). So the penalty may ultimately be spread over a large number of people, hardly any of which were actually responsible for the bad behavior. The few people responsible, who could include people who implemented, directed, or approved the behavior, usually have suffered no consequences. So what is to deter such people from again behaving badly?

So this case seems to be a step forward. One may argue whether off-label marketing should be illegal, but it currently is illegal. Corporate leaders who do not like this law ought to strive to change it, not violate it. If the law is to be upheld, when someone within a corporation implements, directs or approved illegal off-label marketing, then that person should suffer the consequences.

The Kelo Case Redux: Pfizer's "Nice Place" Ends Up Covered with Weeds

Four years ago we posted (here, here and here) about the controversial US Supreme Court decision in the Kelo case. Most discussion of the case at the time focused on individual property rights vs the power of the government to promote economic development, but the case had an important health care angle.

Briefly, the case centered on the taking of private property, including a house owned by Susette Kelo, by a not-for-profit organization, the New London (Connecticut) Development Corporation (NLDC) given the power of eminent domain by the New London city government. While the ostensible rationale for the taking was economic development, the action appeared to have been at the behest of Pfizer Inc, the world's largest pharmaceutical company, which had built a research and development facility in the city, and wanted a suitably upscale and sanitized environment for its workers.

As we previously posted, the NLDC's leadership had multiple conflicts of interest that involved ties to Pfizer. One board member was a Pfizer vice-president. The board president was married to another Pfizer vice-president. Pfizer wanted the part of New London that included Kelo's house made more attractive to complement its new research facility. The husband of the NLDC president had said, "Pfizer wants a nice place to operate. We don't want to be surrounded by tenements."

Kelo's and other property owners' protest of the taking went all the way to the US Supreme Court. As we posted here, the Court decided against the property owners by a 5-4 vote. Justice John Paul Stevens wrote for the majority that the city's "determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. The city has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including - but by no means limited to - jobs and increased revenues." This majority opinion is important, because the Fifth Amendment to the US Constitution provides "nor shall private property be taken for public use without just compensation." Many had interpreted this provision to mean that eminent domain could only be used to take property for public use, e.g., to build a road or a public school, but not for private purposes, like building upscale waterfront developments.

The Associated Press just published an ironic follow-up.

Weeds, glass, bricks, pieces of pipe and shingle splinters have replaced the knot of aging homes at the site of the nation's most notorious eminent domain project.

There are a few signs of life: Feral cats glare at visitors from a miniature jungle of Queen Anne's lace, thistle and goldenrod. Gulls swoop between the lot's towering trees and the adjacent sewage treatment plant.

But what of the promised building boom that was supposed to come wrapped and ribboned with up to 3,169 new jobs and $1.2 million a year in tax revenues? They are noticeably missing.

What happened?

New London the city's prized economic development plan has fallen apart as the economy crumbled.

The Corcoran Jennison Cos., a Boston-based developer, had originally locked in exclusive rights to develop nearly the entire northern half of the Fort Trumbull peninsula.

But those rights expired in June 2008, despite multiple extensions, because the firm was unable to secure financing, according to President Marty Jones.

So that was the result of the economic development plan the Supreme Court majority termed "carefully formulated." The lesson seems to be that when government makes policy to favor individual corporations, the results are bad policy and little public benefit. Government leaders often seem willing to favor specific health care organizations, rationalizing their actions in terms of economic development or promoting health and health care. Doing so may benefit the corporations involved, but rarely individual or public health.

Although US local and national government officials have have increasingly practiced such corporate socialism, they have neglected their regulatory roles. Instead of picking winners and losers, government would do better to act like a combination of an honest policeman on the beat, deterring and punishing dishonest behavior, and in impartial referee, trying to make sure everyone is playing the game honestly. But no doubt government officials used to mingling with the corporate superclass would not be comfortable in the roles of honest cop or impartial referee.

Malpractices of the multitude revisited: "An outstanding job of educating themselves about clinical issues"

At numerous posts at Healthcare Renewal, we have pointed out what we feel to be a serious gap in the credentials of many in biomedical leadership roles.

The gaps are in the form of a near complete lack of any scientific or biomedical education and experience, except perhaps a high school chemistry and biology class or two.

We often receive comments back, usually from "anonymous" posters such as here to our opinions that this expertise gap impairs the judgment of such leaders on medical matters:

... No. I've met individuals with management training who do an outstanding job of educating themselves about clinical issues. And I've met individuals with clinical training who do an outstanding job of educating themselves about management and business issues.

I feel this "anyone can be an expert" sentiment is an important issue to bring outside of the comments section of our posts.

I raised probing questions in response to such messages here in my post "More On Healthcare Management By Domain Neutral Generalists: CIO's Running Hospital Pharmacies and Home Healthcare Divisions?"

Here are my most recent questions to the above anonymous medical self-education proponent:

Re: "I've met individuals with management training who do an outstanding job of educating themselves about clinical issues."

What, exactly, is it that individuals with management training who do an outstanding job of "educating themselves about clinical issues" are professionally or even reasonably qualified to do?

Could they pass medical boards?

Could they reasonably interpret a complex medical article in, say, The Annals, and make truly informed, wise decisions based on that reading?

Could they reasonably evaluate therapeutic alternatives in complex cases, say, someone with a new heart valve who's just developed fever and a lower GI bleed?

In an emergency could they provide medical care? (mot in the legal sense, just in the skills sense.)

If not, why not, and what do you mean by "outstanding job?"

In comparison, I have no MBA or formal business training (other than working for years in my father's pharmacy as a stocker and cashier) but did a good job managing a department of 50+ and a budget of $13 million for an international pharma, solving severe business problems that had been impairing R&D and managing my budget consistently to within 0.5% of EA.

Is there perhaps an asymmetry between medicine and business?

Finally, I ask:

What percentage of a typical medical training curriculum (such as for a Pharm.D. here or a physician here) can a person with a management background absorb through self-education, and is the medical training curriculum therefore irrelevant? Should we just go back to the days of self-trained practitioners? If not, why not?

The critically thought-out answers to these questions expose the territorial invasion of medicine by ill-suited outsiders and dilettantes quite well.

Echoing an observation I wrote about once before in my eight part series on mission hostile EMR's, but addressing it to medical administration where it also applies:

Medical administration reminds me of dentistry in its early days, especially when medical administrators lacking biomedical expertise refer to themselves as "medical professionals."

B.T. Longbothom, author of the second dentistry book published in the U.S. ("A Treatise on Dentistry", 1802), gave an excellent description in his preface of problems at the time. His observations apply to medical administration in our present age:

The word "dentist" has been so infamously abused by ignorant pretenders, and is in general so indifferently understood, that I cannot forbear giving what I conceive to be its original meaning: viz, the profession of one who undertakes and is capable not only of cleaning, extracting, replacing by transplantation and making artificial teeth, but can also from his knowledge of dentistry, preserve those that remain in good condition, prevent in a very great degree, those that are loose, or those that are in a decayed state, from being further injured, and can guard against the several diseases, to which the teeth, gums and mouth are liable, a knowledge none but those regularly instructed, and who have had a long, and extensive practice, can possibly attain, but which is absolutely necessary, to complete the character of a Surgeon Dentist.

Hardly anyone spoke out.

More than thirty years later, untrained practitioners were as prevalent as ever. One of the leading dentists of the time, Shearjashub Spooner, in his "Guide to Sound Teeth, or, A Popular Treatise on the Teeth" (1836) warned the public of a phenomenon I believe now applies to medical administration:

One thing is certain, this profession must either rise or sink. If means are not taken to suppress and discountenance the malpractices of the multitude of incompetent persons, who are pressing into it, merely for the sake of its emoluments, it must sink, - for the few competent and well educated men, who are now upholding it, will abandon a disreputable profession, in a country of enterprise like ours, and turn their attention to some other calling more congenial to the feelings of honorable and enlightened men.

I understand that point of view.

-- SS

Congress expects physicians to implement EHR's when they can't post a PDF on the web?

Congress expects physicians to implement EHR's and review patient histories in detail, when they can't even review their own bills before acting, and post a PDF on the web?

This has to be the lamest, most inept, and/or most patronizing Congress in history (with approval ratings to match, 16% as of Sept. 25 according to Rasmussen):

Washington Examiner
Baucus claims it's too difficult to put health care bill online
By: BARBARA HOLLINGSWORTH
09/24/09

A proposal by Sen. Jim Bunning, R-Ky., that would have required the Senate Finance Committee to post the final language of the $900 billion health care reform bill, as well as a Congressional Budget Office cost analysis, on the committee’s website for 72 hours prior to a vote was rejected 12-11.

... Chairman Max Baucus, D-Mont., himself admitted that “This probably sounds a little crazy to some people that we are voting on something before we have seen legislative language.” Indeed.

Baucus’ excuse - that it would take his committee staff two weeks to post the bill online – sounds a little crazy too.

This very same Congress is pushing physicians to implement EHR's under penalty of Medicare payment reductions, while they claim an inability to post a PDF or Word document online. Implementing EHR's is only several orders of magnitude more complex...

Or, perhaps the "inability" to post the text has to do with text that appears at pages 80-81 of the bill:

"Beginning in 2015, payment [under Medicare] would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization." Thus, in any year in which a particular doctor's average per-patient Medicare costs are in the top 10 percent in the nation, the feds will cut the doctor's payments by 5 percent."

As in the Washington Times:

This provision makes no account for the results of care, its quality or even its efficiency. It just says that if a doctor authorizes expensive care, no matter how successfully, the government will punish him by scrimping on what already is a low reimbursement rate for treating Medicare patients. The incentive, therefore, is for the doctor always to provide less care for his patients for fear of having his payments docked.

And because no doctor will know who falls in the top 10 percent until year's end, or what total average costs will break the 10 percent threshold, the pressure will be intense to withhold care, and withhold care again, and then withhold it some more. Or at least to prescribe cheaper care, no matter how much less effective, in order to avoid the penalties.

No metrics on quality of care, outcomes, patient satisfaction, or other aspects of the complex process of medical care are apparently involved. Just an "aggregation of the physician's resource use."

May I use the words "capricious and arbitrary" to describe this metric?

Now, we should ask:

• Is this what our government means by "data driven healthcare?"
• Do they realize the likely adverse consequences of such half-baked measures?
• Are those who would propose such a bill friends of patients, and friends of physicians?

Where have I seen this before? (How about: biomedical dilettantes helping impair R&D at a pharmaceutical company, now in sale mode due to a poor pipeline of new drugs, through cutting drug discovery resources on the simplistic metric of "cost per user per database?")

Ultimately, this Medicare strategy is the end result of allowing medical dilettantes (no matter how well they've "self educated" themselves about medicine) to control the playing field. It is a poster example of a perverse incentive in direct conflict with the obligation of physicians to provide the best care.

In the end, patients and physicians get screwed.

-- SS

GHOSTING MATILDA

The fall season is upon us and the markets are filled with advertising for Halloween, so our thoughts naturally turn to the recent stories of ghostwriting in medical journals. Here is a lighthearted take on that topic. This parody began on Margaret Soltan’s blog a few days ago, and it has just kept growing.

GHOSTING MATILDA

Once a jolly bagman signed on to some articles.
Corporate ghosts even promised him a fee.
And he sang as he watched and waited till they were in print,
These will be grand right up there on my CV.

Ghosting Matilda, ghosting Matilda,
Who’ll come a-ghosting Matilda with me?
And he sang as he watched and waited till they were in print,
These will be grand right up there on my CV.

This month it’s Janssen, next it’s Bristol-Myers Squibb.
Wyeth and Lilly soon might want to talk to me.
Novartis might sign me up, also AstraZeneca ─
Soon I’ll be famous like that guy at Emory.

Ghosting Matilda, ghosting Matilda,
Who’ll come a-ghosting Matilda with me?
Novartis might sign me up, also AstraZeneca ─
Soon I’ll be famous like that guy at Emory.

Up came an editor, looking for the telltale signs.
Ghost writing’s hard to cover up, you see.
And he found them in the documents: metadata do not lie ─
Bagman just sold his name and passed these off on me.

Ghosting Matilda, ghosting Matilda,
Who’ll come a-ghosting Matilda with me?
And he found them in the documents: metadata do not lie ─
Bagman just sold his name and passed these off on me.

Up jumped the bagman, pointing fingers right and left,
You’ll never prove that I lied, said he.
I will say that underlings failed to send disclosure forms;
Let them be blamed instead, while I get off scot-free.

Ghosting Matilda, ghosting Matilda,
Who’ll come a-ghosting Matilda with me?
I will say that underlings failed to send disclosure forms;
Let them be blamed instead, while I get off scot-free.

Out! said the editor, you’re now persona non grata.
So, too, the Dean and the Provost agreed.
Bagman’s ghost may be heard now, sighing in the library ─
Could have been grand right up there on my CV.

Ghosting Matilda, ghosting Matilda,
Who’ll come a-ghosting Matilda with me?
Bagman’s ghost may be heard now, sighing in the library ─
Could have been grand right up there on my CV.

The Reappearance of a Ghost of Seasons Past

About a year after we started Health Care Renewal, in late 2005, we wrote multiple posts about the complex and unfortunate case of Dr Aubrey Blumsohn's attempts to keep a research project honest. The early posts were here, here, here, and here. In this post, we summarized the case thus:

• Dr Aubrey Blumsohn, a senior lecturer at Sheffield University, and Professor Richard Eastell performed a research project on the effects of the drug risedronate (Actonel, made by Procter & Gamble Pharmaceuticals [P&G]) under a contract between P&G and the University.
• Although the research contract designated Blumsohn and Eastell as "Investigators" under whose direction the project would be carried out, Blumsohn was not given access to the original data collected by the project.
• Despite numerous requests, (like this one), P&G refused access to this data repeatedly.
  Blumsohn was concerned that he and Eastell could be accused of scientific fraud if they continued to make presentations and write articles and abstracts without access to the data which they were supposedly writing about.
• Blumsohn became suspicious that some of the analyses done by P&G could be misleading, especially related to a graph shown to him that omitted 40% of patient data.
• Blumsohn objected to P&G arranging for papers and abstracts to be written by a professional writer, but with Blumsohn listed as first author. Blumsohn was concerned that such ghost-written documents were mainly meant to convey "key messages" in support of P&G's commercial interests.
• Eastell warned Blumsohn not to aggravate P&G, because the company was providing a grant to the University which "is a good source of income."
• After repeated failed attempt to get the data, Blumsohn complained to numerous officials at Sheffield University, including Eastell, medical school Dean Tony Weetman, University Vice-Chancellor Robert Boucher, and the Head of the University's Department of Human Resources, Ms R Valerio.
• Still unable to get the data, he spoke with news reporters about his case. At this point, Sheffield suspended him, but then offered him a severance agreement if he signed a contract binding him not to make any detrimental or derogatory statements about the University and its leaders.

So the case involved suppression and manipulation of research, ghost-writing, institutional conflicts of interest, and attempts to silence a whistle blower. It provides lessons about the downsides of letting commercial firms sponsor and hence control human research designed to evaluate the products or services they sell; and of academic medicine becoming dependent on research money from such firms for such research. Although Health Care Renewal, being US based, most often writes about such issues in the US, this case is a reminder that they are global. (Note that we posted more about this case in 2006, here, here and here, but since then it has not gotten much public attention.)

Last weekend the (UK) Guardian returned to it:

The Guardian has learned that one of Britain's leading bone specialists is facing disciplinary action over accusations that he was involved in 'ghost writing'.

The General Medical Council will call Professor Richard Eastell in front of a fitness to practice committee. Eastell, a bone expert at Sheffield University, has admitted he allowed his name to go forward as first author of a study on an osteoporosis drug even though he did not have access to all the data on which the study's conclusions were based. An employee of Proctor and Gamble, the US company making Actonel, was the only author who had all the figures.

Experts believe the practice is widespread in Britain.

In a letter published in the Journal of Bone and Mineral Research, which carried the original study, he stated: 'In the original paper one of the authors, a statistician working for P&G, Ian Barton, had full access to all the data.' The authors had full access to all the analyses of the data that they requested, he said – but those analyses were carried out by the company.

The letter, published in 2007, also acknowledged flaws in the study. A later independent analysis of the data 'identified some errors and poor practice', he wrote. The study was designed to show the strengths of Actonel which was in fierce competition with a rival bone-strengthening drug called Fosamax, made by Merck.

Eastell's paper concerned a study carried out on behalf of Proctor and Gamble, comparing the bone density of women prescribed Actonel with others who were not. Only the company knew which women were on the drug and which were taking something else.

Eastell's colleague, Dr Aubrey Blumsohn, wanted the codes which would say which of the patients who suffered fractures had been on the drug. The company refused. Blumsohn took his concerns to Eastell, but in a conversation which Blumsohn says he taped , Eastell said he was concerned that persistent requests might damage the relationship they had with the company. Eastell is said to have told him: 'The only thing that we have to watch all the time is our relationship with P&G. Because … we have the big Sheffield Centre Grant [from P&G] which is a good source of income, we have got to really watch it.' .

So, after four years, this case has generated an official hearing of sorts. The hearing is obviously late, and seemingly will only be devoted to only one aspect of this case (ghost writing). However, at least our friends in the UK are doing something. I cannot recall a single case that resulted in any serious consideration of imposing negative consequences on anyone who was accused of suppressing research, manipulating research, endorsing ghost-writing, or intimidating a whistle-blower. In fact, many of the more troubling cases have never resulted in any sort of public discussion either at the institutions at which they occurred, or at any organization with relevant regulatory, or even just moral authority. So the GMC hearing is at least a step forward. Two cheers for the British GMC, and none for US universities, academic medical centers, professional societies, and government regulators.

(If anyone can remind me of a case in which there was a public discussion at the relevant institution, or some public consideration of the case by a regulatory agency, professional society, or some group with moral authority, please remind me of it, and I would be happy to post about it.)

Why Have Governing Boards Forsaken Their Duties? - Ideas from Silverglate and Malchow

We have posted frequently about the governance and leadership of academic medical organizations. While one would think that health care organizations, and especially academic health care organizations ought to be held to a particularly high standard of governance, we have noted how their governance is often unrepresentative of key constituencies, opaque, unaccountable, unsupportive of the academic and health care mission, and not subject to codes of ethics. How the governance of organizations with such exemplary missions and sterling reputations got this way has been unclear.

Now there are new insights from the ongoing discussion of one of the most interesting and controversial cases of disputed organizational governance. We have often come back to the example of Dartmouth College, of which Dartmouth Medical School is a significant component. We most recently discussed here an ongoing dispute about the extent that the institution's board of trustees ought to represent the alumni at large, or instead, ought to be a self-elected body not clearly accountable to anyone else. (For our take on this complex case, start here and follow the links backward.) The latest development in the case is a lawsuit filed by Dartmouth alumni challenging an increase in the number of self-elected, or "charter" trustees, which they charged broke an 1891 agreement that established numerical parity between alumni-elected and charter trustees.

Soon after this lawsuit was filed, an important article by Harvey Silverglate (one of the founders of FIRE, the Foundation for Individual Rights in Education) and Joseph Malchow appeared. For those interested in the case, the article includes extensive detail, with multiple citations, on all the twists and turns of the case, and is very much worth reading. (See this post on FIRE's Torch blog for more background and discussion.)

However, the article also features extensive scholarship on governance of US not-for-profit institutions, focused on academic institutions (including medical academia), and with relevance to other not-for-profit or non-governmental health care organizations. In particular, the article sheds light on how the governance of such organizations has become so degraded.

First, Silverglate and Malchow summarized the duties of governing boards:

Traditionally, fiduciary duty [of the board of trustees] has been understood as having two components: the duty of loyalty and the duty of care. The duty of loyalty requires a fiduciary to act in a manner he or she reasonably believes to be in the best interests of the organization. The duty of care obliges directors to inform themselves of reasonably available information prior to making a business decision. More recently, courts have considered the duty to act in good faith [the duty of obedience] as a fiduciary requirement. This component, similar to the duty of care, is satisfied when a director makes informed decisions without conflicts of interest.

The question central to the dispute regarding Dartmouth governance is to what or to whom do fiduciaries owe their duty. Corporate directors have a relatively straightforward task of serving the corporation and its shareholders. In the case of a charitable trust, however, which generally does not have 'ascertainable beneficiaries who can enforce their rights,' the duty of fiduciaries is instead directed toward fulfilling or furthering the organization’s mission

So just to summarize, considerable discussion, scholarship, and I believe some some laws support the notion that the board of a not-for-profit organization is obliged to take reasonable care to make informed decisions free of conflicts of interest to uphold the organization's mission.

However, currently, many boards value deference to the organization's (usually hired) top managers and avoidance of internal conflict within the board more highly than these obligations:

Dartmouth, to be sure, is far from the only place where fealty to organizational leaders—and the notion of 'going along in order to get along' —has been placed before true fiduciary duty.

Silverglate and Malchow have some important ideas about how we came to this.

Not-for-profits became more like for-profit corporations:

During the 1980s, traditional nonprofit organizations supported by donations and governed by donors and volunteers became increasingly displaced by professionally staffed commercial nonprofits, supported by grants, contracts, and earned income, and governed by insider boards. The shift in governance was armored by progressively professionalized and entrepreneurial management, which was perceived to be more adept at control of the ebb and flow of funds in the American market.

Top hired not-for-profit executives assumed more power at the expense of other constituencies, including the professionals who did the work:

By the 1990s, with faculty power firmly institutionalized at colleges and universities, a notion that university presidents were bereft of power took hold. The AGB [Association of Governing Boards], in 1996, argued that university presidents needed to regain power with a pivotal document of its own: Renewing the Academic Presidency: Stronger Leadership for Tougher Times. Though this outlook was applied to varying degrees at colleges and universities, an imperative toward greater executive power in universities was thus established.

Presidential and professorial decision-making power, combined with the rise of the administrative bureaucracy in academia, have generally relegated trustees to a secondary role in campus affairs.

Attempts at reforming governance were inappropriately based on a for-profit corporate model, and particularly the need to project unity and avoid confrontation among the leadership trumped transparency:

Aligning academic boards with the cultural trends of increased critical oversight has obvious benefits, but some boards have moved to adopt the norms of for-profit corporate governance that are simply not applicable to the university context. Admittedly, this is a thin distinction when considered on a theoretical level. But in practical terms, misguided nonprofit reforms—some of which, upon close examination, actually violate an institution’s mission—are readily evident.

For example, some nonprofit boards have emphasized the adoption of formal nondisclosure pledges or confidentiality agreements that step well beyond nondisclosure of proprietary information. This is hardly uncommon in the business sector, where bottom-line strictures demand a certain degree of internal accord and non-transparency. And though there is evidence that nonprofit board directors have, from time to time, attempted to hush public dissent, only recently have dominant majorities of some nonprofit boards proposed and ratified binding pledges not to publicly air differences. According to a 2006 BoardSource publication, 'If a board member does not support a decision for whatever reason, [he or] she has a responsibility to remain silent or step down from the board.' (Recall the resignation offer made to Zywicki before his second term was denied.)

These directives, written in highly influential publications in the realm of university governance, disregard the important role that public discussion has on decision-making at universities and nonprofits in general. 'In the nonprofit context, nondisclosure agreements or the use of 'executive session' rules to curtail debates about policy and procedure depart from established norms. They shut down opportunities for public dialogue and for communication with other concerned and influential parties, including reporters,' nonprofit specialist Norman I. Silber wrote in the Oregon Law Review.

Emphasis on raising money rather than upholding the mission has lead to board deference to hired executives.

Fidelity to institutional leaders, rather than institutional mission, is now paramount in higher education, as deviation from accepted decisions is perceived as potentially shrinking the donor base. Administrators cringe at public disagreement; rather than focusing on the long-term likelihood that competing ideas will result in implementation of the fittest, they tend to focus on the short-term possibility that a particular alumni subset may be offended. This shortsighted outlook is not only an insult to the intelligence of alumni and other constituencies, but it is ultimately detrimental to the institution, as established ideas are enthroned and unchallenged. It is also based on false premises: as in the case of Dartmouth, there is no established correlation between public criticism and donor decline.

Boards are increasingly composed of executives of for-profit corporations, particularly in the finance field, who may grant the same deference to the organizations' leaders that they would like from their own board. That is, hired executives identify more with other executives than with the organizations they are supposed to be leading:

Judge Cabranes noted that trustees, especially business executives, tend to act toward university presidents as they wish their boards would act toward them—deferentially. And the phenomenon of board members believing they serve at the pleasure of the executive is what one nonprofit attorney and blogger, has termed 'upside down board.' The ascendance of the hedge-fund community, a peculiar province of graduates of elite institutions, has contributed to the prevalence of the upside down board....

The article suggests some issues that need to be addressed to make governance more accountable, transparent, ethical and honest. Boards need to be reminded of their duties, and that their loyalty should be to the mission, not the organization's executives, or the views of the board's majority. Transparency and open discussion are more important than projecting the (sometimes false) impression of unity. New board members should be chosen for their loyalty to the mission rather than their similarity to and congeniality with current board members.

I strongly suggest that anyone who cares about how health care organizations are run ought to read Silverglate and Malchow's full article. It should be required reading for current and would-be board members of academic and health care not-for-profit organizations (but I will not hold my breath waiting for them to read it.)